TIDMSYM
RNS Number : 0314Q
Symphony Environmental Tech. PLC
07 September 2017
7 September 2017
SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC
("Symphony", the "Company" or "the Group")
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this information is considered to be in the public
domain
Interim Results
Symphony Environmental Technologies Plc (AIM: SYM), a global
specialist in products and technologies to "make plastic smarter",
today announces its interim financial statements for the six-month
period ended 30 June 2017.
Highlights
-- Revenues increased by 14% to GBP3.69 million (2016 H1: GBP3.23 million)
-- Gross profit increased by 13% to GBP1.84 million (2016 H1: GBP1.63 million)
-- Operating profit increased by 276% to GBP109,000 (2016 H1: GBP29,000)
-- Profit before tax increased by 400% to GBP95,000 (2016 H1: GBP19,000)
-- Basic earnings per share increased by 50% to 0.06 pence (2016 H1: 0.04 pence)
Non-financial highlights
-- d2p household glove launch in UK and first order received for d2p gloves in Italy
-- Dadex Eternet Limited ("Dadex") launch d2p treated water pipes in Pakistan
-- d2w awarded the Quality Mark from the Saudi Standards,
Metrology and Quality Organisation ("SASO") which makes Symphony an
authorised supplier for the purpose of the Saudi law which requires
everyday plastic products to be oxo-biodegradable
Commenting on the results Nirj Deva, Chairman of Symphony,
said:
The business is performing well and I am pleased to present a
positive set of results for the first half of 2017 with growth in
sales and profit.
Revenues increased by 14% compared to the same period last year
to GBP3.69 million (2016 H1: GBP3.23 million) primarily as a result
of d2w growth in the Middle East and South America. Gross profit
margins have remained consistent at 50%, resulting in an increase
in gross profit contribution in line with revenue, at GBP1.84
million (2016 H1: GBP1.63 million).
Expenses marginally increased during the period by 7% from
GBP1.50 million to GBP1.60 million due to augmented R&D
activities, and costs associated with quality assurance audits,
customer trials and government approvals, such as obtaining the
SASO Quality Mark.
As previously communicated, most of our revenues are derived
from d2w controlled-life plastic technology which is supplied
either as a masterbatch to manufactures or finished products to
end-users. Global demand for our d2w products is clearly
increasing, as biodegradable plastics are becoming a more preferred
solution, due to demands by governments and industry, and also by
consumer pressure.
This is currently most apparent in the Middle East, and in
particular in Saudi Arabia where, as advised at our Annual General
Meeting on 12 May 2017, enforcement of the mandatory use of
oxo-biodegradable technology has commenced. We received an initial
uplift in orders and enquiries from our distributor in the region,
and are monitoring closely to establish expected recurring revenues
over the short to medium term.
d2p "designed to protect" technology is also supplied as a
masterbatch and finished product. During the period, Dadex, one of
the largest plastic producers in Pakistan, launched a range of
plastic water pipes using our d2p antimicrobial masterbatch, and I
am pleased to say that we have since received repeat orders, as
their customers start to adopt their d2p antimicrobial treated
pipes.
The d2p "Protector Health & Hygiene" consumer product brand
was launched in Wilko during this period as a household glove. This
is the first of a developing range, which we will hopefully grow
over the coming year. Orders for d2p treated gloves have also been
received through a new distribution partner in Italy for retail
distribution.
The second half of 2017 has started strongly and the Board
remains pleased with progress during the period and the increasing
commercial traction of the Group's products. The Board looks
forward to updating the market as further progress is achieved and
is very confident of meeting market expectations for the full
year.
For further information, contact:
Contacts
Symphony Environmental Technologies
Plc
Michael Laurier, CEO Tel: +44 (0)
20 8207 5900
Ian Bristow, FD
Cantor Fitzgerald Europe
David Foreman / Callum Butterfield Tel: +44 (0)
(Corporate Finance) 20 7894 7000
Jonnie Cox (Sales)
NOTES TO EDITORS:
About Symphony Environmental Technologies plc
Symphony has developed and continues to develop, controlled-life
plastic technology which helps tackle the problem of microplastics
by turning ordinary plastic at the end of its service-life into
biodegradable materials. It is then no longer a plastic and can be
bioassimilated in the open environment in the same way as a leaf.
The technology is branded d(2) w(R) and appears as a droplet logo
on many thousands of tonnes of plastic packaging and other plastic
products around the world. In some countries oxo-biodegradable
plastic is mandatory. For a video of d2w(R) plastic degrading see
https://www.youtube.com/watch?v=tQ7ce532BBM
In addition, Symphony has developed a range of additives,
concentrates and master-batches marketed under its d2p(R) brand,
which can be incorporated in a wide variety of plastic and
non-plastic products so as to give them protection against many
different types of bacteria, fungi, algae, moulds, insects and
fire.
Symphony has also developed the d(2) Detector(R), a portable
device which analyses plastics and detects counterfeit products.
This will be very useful to government officials tasked with
enforcing legislation. Symphony's d(2) t tagging and tracer
technology is also available for further security. See
www.d2t.net
Symphony has a diverse and growing customer-base and has
established itself as an international business with 74
distributors around the world. Products made with Symphony's
plastic technologies are now available in nearly 100 countries and
in many different product applications. Symphony is certified to
ISO9001 and ISO14001.
Symphony is a member of The Oxo-biodegradable Plastics
Association (www.biodeg.org) (OPA), the Society for the Chemical
Industry (UK), and the Pacific Basin Environmental Council.
Symphony actively participates in the Committee work of the British
Standards Institute (BSI), the American Standards Organisation
(ASTM), the European Standards Organisation (CEN), and the
International Standards Organisation (ISO).
Further information on the Symphony Group can be found at
www.symphonyenvironmental.com.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "will" or the negative of those, variations or
comparable expressions, including references to assumptions. These
forward looking statements are not based on historical facts but
rather on the Directors' current expectations and assumptions
regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), competitive
advantages, business prospects and opportunities. Such forward
looking statements re ect the Directors' current beliefs and
assumptions and are based on information currently available to the
Directors.
A number of factors could cause actual results to differ
materially from the results discussed in the forward looking
statements including risks associated with vulnerability to general
economic and business conditions, competition, environmental and
other regulatory changes, actions by governmental authorities, the
availability of capital markets, reliance on key personnel,
uninsured and underinsured losses and other factors, many of which
are beyond the control of the Company. Although any forward looking
statements contained in this announcement are based upon what the
Directors believe to be reasonable assumptions, the Company cannot
assure investors that actual results will be consistent with such
forward looking statements. Accordingly, readers are cautioned not
to place undue reliance on forward looking statements. Subject to
any continuing obligations under applicable law or any relevant AIM
Rule requirements, in providing this information the Company does
not undertake any obligation to publicly update or revise any of
the forward looking statements or to advise of any change in
events, conditions or circumstances on which any such statement is
based.
Chief Executive's review
This reporting period shows a good set of trading results and
customer activity is at an all-time high for both d2w and d2p
products and technologies.
Growth in sales has resulted from positive changes of
legislation and an increase in customer demand in our key markets
which continue to be outside of Europe.
The majority of our revenue is in US Dollars which continues to
be favourable against Sterling.
Trading results
Total revenue increased 14% for the first six months of 2017 to
GBP3.69 million compared to GBP3.23 million for the first six
months of 2016. The increase was mainly due to d2w growth in the
Middle East and South America. Gross profit for the same period was
GBP1.84 million compared to GBP1.63 million for the first half of
2016, an increase of 13% and in line with the revenue increase. The
gross profit margin was stable at 49.7% (2016 H1: 50.4%).
Administrative expenses increased by 7% to GBP1.60 million
during the period (2016 H1: GBP1.50 million). This was due to
increased R&D activity and costs associated with quality
assurance audits, primarily in obtaining the SASO Quality Mark.
The Group's operating profit for the period increased by 276% to
GBP109,000 (2016 H1: GBP29,000) and net profit before tax was
GBP95,000 (2016 H1: GBP19,000). Profit after tax was GBP95,000
(2016 H1: GBP64,000 after receipt of a GBP45,000 R&D tax
credit).
Earnings per share for the period increased to 0.06 pence (2016
H1: 0.04 pence).
Balance sheet and cash-flow
Cash of GBP0.28 million was consumed by operations during the
period (2016 H1: GBP0.28 million) due to an increase in receivables
and reduction in trade payables. Trade receivables increased as a
result of higher revenues in the second quarter of the period.
Trade and other receivables were GBP1.80 million as at 30 June 2017
(31 December 2016: GBP1.58 million). Trade and other payables were
GBP0.75 million as at 30 June 2017 (31 December 2016: GBP0.92
million).
The net cash consumed was funded by our invoice finance facility
together with proceeds from new shares issued totalling GBP92,000.
The Group has an invoice-discounting facility of GBP1.50 million to
assist in funding outstanding receivables when required. Group net
borrowings (borrowings after cash at bank and in hand) were GBP0.58
million at 30 June 2017 (31 December 2016: GBP0.48 million and 30
June 2016: GBP0.34 million). The Group has agreed an additional
GBP0.50 million facility to fund accelerated revenue growth, if
required. The Board believes that the Group has sufficient working
capital to support the business and its current opportunities going
forward.
Outlook
The issue of plastic pollution, especially by microplastics, has
become a high-profile topic and the global pressure for change has
never been greater than now. It is not a simple task to replace
plastics due to cost and product attributes such as food
preservation and general protection. This developing situation is
therefore creating more attention to less disruptive and more
economical alternatives such as d2w controlled-life technology.
Demand for d2w technology and finished products is therefore
expected to increase as more governments pass legislation or
accelerate the enforcement process. This, together with more
consumer awareness is becoming a reality after many years of
investment in PR and marketing.
As previously communicated, we have a substantial number of
customer led d2p projects and some of these are nearing completion
of the R&D stage. The main areas include flame retardants,
insecticides, and odour adsorbers, together with antimicrobial
masterbatches and finished products.
We look forward to the future with confidence.
Michael Laurier, Chief Executive
Condensed consolidated interim statement of comprehensive
income
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited
Audited
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- -------- -------- -------- --------
Revenue 3,693 3,228 6,801
Cost of sales (1,856) (1,600) (3,395)
Gross profit 1,837 1,628 3,406
Distribution
costs (128) (104) (176)
Administrative
expenses:
* recurring (1,600) (1,467) (3,031)
* non-recurring - (28) (54)
-------- -------- --------
Administrative
expenses (1,600) (1,495) (3,085)
Operating
profit/(loss):
* recurring 109 57 199
* non-recurring - (28) (54)
--------------------------- -------- -------- -------- -------- -------- --------
Operating
profit 109 29 145
Finance costs (14) (10) (22)
--------------------------- -------- -------- -------- -------- -------- --------
Profit for
the period
before tax 95 19 123
Tax credit - 45 45
--------------------------- -------- -------- -------- -------- -------- --------
Profit for
the period 95 64 168
--------------------------- -------- -------- -------- -------- -------- --------
Total comprehensive
income for
the period 95 64 168
--------------------------- -------- -------- -------- -------- -------- --------
Earnings per
share:
Basic 0.06p 0.04p 0.11p
Diluted 0.06p 0.04p 0.10p
--------------------------- -------- -------- -------- -------- -------- --------
All results are attributable to the owners of the parent.
There were no discontinuing operations for any of the above
periods.
Condensed consolidated interim statement of financial position
(balance sheet)
At At At
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
------------------------------ ---------- ---------- ------------
Assets
Non-current
Property, plant and
equipment 269 334 298
Intangible assets 55 65 62
324 399 360
Current
Inventories 455 388 416
Trade and other receivables 1,799 1,296 1,576
Cash at bank and in
hand 44 45 437
------------------------------ ---------- ---------- ------------
2,298 1,729 2,429
------------------------------ ---------- ---------- ------------
Total assets 2,622 2,128 2,789
------------------------------ ---------- ---------- ------------
Equity
Equity attributable
to owners of
Symphony Environmental
Technologies plc
Share capital 1,516 1,499 1,499
Share premium account 3,608 3,533 3,533
Retained earnings (3,876) (4,075) (3,971)
------------------------------ ---------- ---------- ------------
Total equity 1,248 957 1,061
------------------------------ ---------- ---------- ------------
Liabilities
Non-current
Interest bearing loans
and borrowings - 4 2
------------------------------ ---------- ---------- ------------
- 4 2
Current
Interest bearing loans
and borrowings 621 388 808
Trade and other payables 753 779 918
------------------------------ ---------- ---------- ------------
1,374 1,167 1,726
------------------------------ ---------- ---------- ------------
Total liabilities 1,374 1,171 1,728
------------------------------ ---------- ---------- ------------
Total equity and liabilities 2,622 2,128 2,789
------------------------------ ---------- ---------- ------------
Condensed consolidated interim statement of changes in
equity
Equity attributable to the owners of Symphony Environmental
Technologies plc:
Share Share Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- --------- ---------- --------
For the six
months to 30
June 2017
Balance at 1
January 2017 1,499 3,533 (3,971) 1,061
Issue of share
capital 17 75 - 92
----------------------- --------- --------- ---------- --------
Transactions
with owners 17 75 - 92
Total comprehensive
income for the
period - - 95 95
Balance at 30
June 2017 1,516 3,608 (3,876) 1,248
----------------------- --------- --------- ---------- --------
For the six
months to 30
June 2016
Balance at 1
January 2016 1,499 3,533 (4,139) 893
Total comprehensive
income for the
period - - 64 64
Balance at 30
June 2016 1,499 3,533 (4,075) 957
----------------------- --------- --------- ---------- --------
For the year
to 31 December
2016
Balance at 1
January 2016 1,499 3,533 (4,139) 893
Total comprehensive
income for the
year - - 168 168
Balance at 31
December 2016 1,499 3,533 (3,971) 1,061
----------------------- --------- --------- ---------- --------
Condensed consolidated interim statement of cash flows
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------------------------- ----------- ----------- -------------
Operating activities:
Profit for the period
after tax 95 64 168
Depreciation 38 44 86
Amortisation 8 8 13
Loss on disposal - 18 10
Foreign exchange 53 - (25)
Tax credit - (45) (45)
Interest expense 14 10 22
Change in inventories (39) 89 62
Change in trade and
other receivables (272) (444) (694)
Change in trade and
other payables (173) (73) 60
----------------------------- ----------- ----------- -------------
Cash consumed in operations (276) (329) (343)
Tax received - 45 45
----------------------------- ----------- ----------- -------------
Net cash consumed in
operations (276) (284) (298)
----------------------------- ----------- ----------- -------------
Investing activities:
Additions to property,
plant and equipment (19) (4) (8)
Proceeds from disposals
of property, plant
and equipment 9 5 11
Additions of intangible
assets - - (2)
Cash (consumed)/generated
in investing activities (10) 1 1
----------------------------- ----------- ----------- -------------
Financing activities:
Movement in working
capital facility (42) 201 464
Discharge of finance
lease liability (2) (2) (4)
Proceeds from share
issue 92 - -
Interest paid (14) (10) (22)
----------------------------- ----------- ----------- -------------
Cash generated in financing
activities 34 189 438
----------------------------- ----------- ----------- -------------
Net change in cash
and cash equivalents (252) (94) 141
Cash and cash equivalents,
beginning of period 258 117 117
Cash and cash equivalents,
end of period 6 23 258
----------------------------- ----------- ----------- -------------
Bank overdraft of GBP38,000 (30 June 2016:
GBP22,000) (31 December 2016: GBP179,000)
is included in cash and cash equivalents.
Notes to the interim financial statements
1 Nature of operations and general information
Symphony Environmental Technologies plc (the "Company") and
subsidiaries' (together the "Group") principal activities include
the development and supply of environmental plastic additives and
products, and the development of waste to value systems.
Symphony Environmental Technologies plc, a public limited
company, is the Group's ultimate parent company. It is incorporated
and domiciled in England. The address of its registered office is 6
Elstree Gate, Elstree Way, Borehamwood, Hertfordshire, WD6 1JD,
England. The Company's shares are listed on the AIM market of the
London Stock Exchange.
These condensed interim consolidated financial statements
("interim financial statements" or "interim report") are for the
six months ended 30 June 2017. They do not include all of the
information required for full annual financial statements, and
should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2016.
The financial information set out in this interim report does
not constitute statutory accounts. The Group's statutory financial
statements for the year ended 31 December 2016 have been filed with
the Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
Section 498(2) or 498(3) of the Companies Act 2006. These interim
condensed consolidated financial statements have not been
audited.
These interim financial statements have been prepared in
accordance with the requirements of International Accounting
Standard ("IAS") 34 "Interim Financial Reporting", and are
presented in Sterling (GBP), which is the functional currency of
the parent company. They have been prepared under the historical
cost convention. They have also been prepared on the basis of the
recognition and measurement requirements of International Financial
Reporting Standards that are adopted by the European Union, and the
policies and measurements are consistent with those stated in the
financial statements for the year ended 31 December 2016.
These interim financial statements were approved by the board on
6 September 2017.
2 Significant accounting policies
These interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year ended 31 December 2016. There
have been no changes in the period.
3 Seasonal fluctuations
The Group operates in many countries and in many different
markets. There are therefore no formal or considered seasonal
fluctuations affecting the operations of the Group.
4 Segmental analysis
The Board considers that the Group does not have separate
operating segments as defined under IFRS 8.
5 Shares issued
Shares issued are summarised as follows:
6 months 6 months Year to
to to 31 December
Shares issued 30 June 30 June 2016
and fully paid 2017 2016
--------------------- -------------- -------------- --------------
- beginning of
period 149,939,377 149,939,377 149,939,377
- issued during 1,675,000 - -
the period
--------------------- -------------- -------------- --------------
Total equity shares
issued and fully
paid at end of
period 151,614,377 149,939,377 149,939,377
---------------------- -------------- -------------- --------------
6 Earnings per share and dividends
The calculation of earnings per share is based on the result
attributable to ordinary shareholders divided by the weighted
average number of shares in issue during the period.
The calculation of diluted earnings per share is based on the
basic earnings per share, adjusted to allow for the issue of shares
on the assumed conversion of dilutive options and warrants which
were exercisable during the period.
Reconciliations of the results and weighted average numbers of
shares used in the calculations are set out below:
Basic and diluted 6 months 6 months Year to
to 30 to 30 31 December
June June 2016
2017 2016
------------------------------ --------------- -------------- --------------
Profit attributable GBP95,000 GBP64,000 GBP168,000
to owners of the Company
Weighted average number
of ordinary shares in
issue 151,614,377 149,939,377 149,939,377
------------------------------- --------------- -------------- --------------
Basic earnings per share 0.06 0.04 0.11 pence
pence pence
------------------------------ --------------- -------------- --------------
Dilutive effect of weighted
average options and
warrants 16,136,953 24,456,500 15,794,717
Total of weighted average
shares together with
dilutive effect of weighted
options and warrants 167,751,330 174,395,877 165,734,094
------------------------------- --------------- -------------- --------------
Diluted earnings per 0.06 0.04 0.10 pence
share pence pence
------------------------------- --------------- -------------- --------------
No dividends were paid for the year ended 31 December 2016.
7 Availability of Interim Financial Statements
Paper copies of the Interim Financial Statements will be sent to
shareholders upon request. Shareholders will be able to download a
copy of the Interim Financial Statements from the Group's website
www.symphonyenvironmental.com. Further copies of the Interim
Financial Statements will be available from the Company's
Registered Office at 6 Elstree Gate, Elstree Way, Borehamwood,
Hertfordshire WD6 1JD.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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